Avoiding new build LVR vagaries

Our Experts Answer:

There is some confusion with banks applying variances on what they consider new builds. But all banks will now consider your recent build to be an existing dwelling. Unfortunately, this means they won’t allow any movement on the LVR across both the existing and the "new" investments being kept at 60% if you look to remove your owner-occupied property.

This is one of the annoyances with how the new rules have been rushed in. There are many people who were only selling to get access to capital. But now, if they have multiple investments with the same bank, they are being made to keep the remaining LVR at 60%. We have heard of several cases where they would not have sold if they had known this would be the case.

In your situation, you should consider looking at a prime non-bank option. They can still lend above the 60% threshold as they are exempt from the new regulations. Potentially, you could move your "new build" to one where, if you fit criteria, they will lend to 80% on the property.